Tethered

Buying Time Warner will leave the telecom giant about $180 bln in hock. Cash flow from the HBO parent will help, but it needs to spend heavily on content and wireless technology. CEO Randall Stephenson may have to offload assets if he wants to maintain a big dividend.

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AT&T is due to report third-quarter earnings on Oct. 24. The telecom firm warned in a regulatory filing on Oct. 11 it lost 90,000 U.S. video customers in the third quarter because of competition, hurricanes and stricter credit standards.

On Oct. 23, the company announced it had extended “for a short period of time” the Oct. 22 termination date of its merger agreement with Time Warner to facilitate regulatory approval.

AT&T declared on Sept. 29 a quarterly dividend of 49 cents per share. The company, whose dividend yield of 5 percent ranks 13th among S&P 500 companies, has increased the dividend every year since 1984.

Makan Delrahim was confirmed on Sept. 27 as the Department of Justice’s Assistant Attorney General for the Antitrust Division. One of the first big decisions he’s likely to make will be to decide whether to approve AT&T’s $109 billion acquisition of Time Warner.

The company’s chief executive, Randall Stephenson, told investors on Sept. 12 at Goldman Sachs' Communacopia conference he expected the deal to close by the end of the year. He also said the firm will pay down debt aggressively, invest in the business, and stay committed to the dividend.

AT&T said in a statement: “We remain strongly committed to maintaining a sound balance sheet and solid investment-grade credit metric.”

“We expect pro forma net debt to EBITDA to be in the 2.5 range by the end of the first year after the close of the transaction and approaching the 1.8 times range by the end of year four.”

AT&T is considering the sale of its pay-TV operations in Latin America, a deal which could be valued at more than $8 billion, Reuters reported on Sept. 15, citing people familiar with the matter.